Federal jurist improperly took over bankruptcy case, judicial

panel says

By Henry Weinstein

LA Times Staff Writer

January 18, 2004

A veteran federal judge faces disciplinary proceedings after he improperly seized control of a bankruptcy

case in an effort to protect a woman whose probation he had decided to oversee personally, according to

a federal judicial disciplinary council.

Penalties for District Judge Manuel L. Real, 79, who has been a controversial member of the federal

judiciary in Los Angeles since 1966, could range from a private reprimand to loss of the authority to hear

cases.

The proceedings in the case have largely taken place out of the public eye. The judicial council of the U.S.

9th Circuit Court of Appeals, which supervises federal judges in California and eight other Western states,

handed down its ruling on Real in mid-December, but the decision has never been formally published and

has not been placed on the court website.

The decision, cryptically titled "In Re Complaint of Judicial Misconduct," does not mention Real by name,

but his identity is revealed in a court opinion referred to in the disciplinary panel's ruling. 

Legal experts say that although the next steps in the case are up to the chief judge of the 9th Circuit, the council's ruling means

that some sort of penalty against Real is highly likely.

That alone would make his case rare. More than 99% of the complaints filed against federal judges around the country are

dismissed out of hand. The 9th Circuit council has reprimanded only two jurists in the last decade, while rejecting hundreds of

complaints, according to official records.

Beyond that, Real's opponents say, the case provides a textbook example of the way a federal judge — holder of a lifetime

appointment — can abuse his power on behalf of an individual he favors.

Real did not respond to requests for comment.

The judge has a reputation for being charming outside court but cantankerous and peremptory on the bench. He is famous

among lawyers for telling attorneys who appear before him: "This isn't Burger King. We don't do it your way here."

Real has "created a courtroom of terror," said Victor Sherman, a Los Angeles criminal defense lawyer.

The case involves one of Real's idiosyncrasies: For the last 25 years, he has personally supervised numerous cases of criminals

on probation, according to a statement he made to the judicial council. The judge said he had taken pride in helping criminals

rehabilitate themselves by getting directly involved in their activities.

One of those people on probation was Deborah M. Canter, who pleaded guilty in April 1999 to one count of loan fraud and

three counts of making false statements.

Real sentenced Canter, who was 42 at the time of her plea, to five years' probation and community service and put her under

his personal supervision, meaning that he met with her and her probation officer at 120-day intervals.

Two months before Canter pleaded guilty, she and her husband, Gary — a member of the family that owns Canter's Deli on

Fairfax Avenue — had separated. He moved out of the house on Highland Avenue where the couple had been living with their

daughter.

The home was owned by a trust established by Gary Canter's parents. While the couple were living together, Gary sent rent

checks to his father, Alan. But after the couple split up, Deborah Canter apparently fell behind in the rent. In October 1999,

Alan Canter filed suit against her, seeking to evict her from the house and to collect $5,000 in back rent.

Twenty-four minutes before a trial was to begin on the eviction, she filed for bankruptcy, which had the effect of stopping the

eviction proceedings.

A few months later, in February 2000, she signed an agreement to move out. But just days before she was scheduled to leave

the house, a secretary for her lawyer drafted a letter from Canter to Real, "asking for his help in preventing her eviction,"

according to the judicial council's findings.

Shortly afterward, Real used his power as a federal judge to take control of the bankruptcy case away from U.S. Bankruptcy

Judge Alan Ahart. Real then reinstated an order blocking the eviction that Canter and her attorney had earlier agreed to.

Real's ruling came "a day or two after" Canter delivered the letter, according to the statements from the secretary who drafted

the letter.

"The next time they saw each other" Canter told the secretary the letter had "worked," according to the judicial council's

decision. Canter could not be reached for comment.

Real twice denied motions filed by the Canter trust that would have permitted it to evict Deborah Canter. When Herbert Katz,

an attorney for the trust, asked why, Real's only explanation was, "Because I said it," according to court records.

Real's order surprised Deborah Canter's lawyer, Andrew E. Smyth. In an interview, he said that months later he told his

secretary he was still perplexed about what had happened. Then the mystery was solved.

"She said Real acted 'because me and Debbie wrote a letter and Debbie took it down to him,' " Smyth said, adding that he was

"shocked and aghast…. It was a complete no-no going to a judge secretly without talking to the other side. No one should do

that. That's forbidden."

Smyth described his former client as "cute, pixie-like" woman who "acts like a helpless waif."

Katz, the lawyer for the other side, also said he had been stunned by Real's actions. He remained mystified about what had

happened until he read the recent decision of the judicial council.

Katz, who served as a bankruptcy judge in San Diego for a decade, said that in 40 years as a member of the bar, he had never

seen a judge do what Real had done.

"I would never in my wildest dreams have believed" that a federal judge "would simply take a case away from another judge so

that he could affect the outcome of the case," Katz said. "I guess it was naive on my part."

Although he did not know the reason for Real's actions, Katz appealed the judge's decision, and in August 2002, the 9th

Circuit sided with him. The federal Bankruptcy Code allows a district judge to take control of a case away from the

Bankruptcy Court, but the judge has to provide valid reasons for doing so, the appeals court said. Real never did so.

His actions improperly permitted Deborah Canter to stay in the house "rent-free for almost three years, resulting in a $35,000

loss of rental income" to the Canter trust, the court said in its 3-0 ruling.

Real's actions were an "excursion outside the confines of [his] lawful jurisdiction" and showed a "persistent disregard of the

federal rules" of civil procedure, 9th Circuit Judge Johnnie B. Rawlinson said in the court's opinion.

Soon after the ruling, Deborah Canter and the Canter Family Trust reached an out-of-court settlement, and she moved out of

the house.

The case might have ended there, but for the fact that Real over the years has made some determined enemies. One is Venice

attorney Stephen Yagman.

In 1984, Real fined Yagman $250,000, a penalty that was later dismissed on appeal. The judge said the lawyer had filed a libel

suit in bad faith. Yagman retorted by saying Real suffered from "mental disorders" and compared him to Tomas de

Torquemada, the leader of the Spanish Inquisition.

A decade later, a special disciplinary panel of the federal court in Los Angeles suspended Yagman for two years for making

intemperate comments about another federal judge. Yagman successfully appealed that move as well, and he asserted that Real

had played a key role in instigating it.

When Yagman learned about the dispute involving Canter, he filed a misconduct charge against Real, suggesting that the judge's

actions stemmed from a relationship with Canter, whom Yagman characterized as an "attractive female."

"Real violated the most important ethic of a judge," Yagman said in a recent interview, adding that the judge had acted

"according to his own good pleasure," rather than "according to the laws."

The case went initially to the 9th Circuit's chief judge, Mary M. Schroeder of Phoenix. She dismissed Yagman's complaint,

saying he had not provided "any objectively verifiable proof" of his charge.

Moreover, Schroeder said, the Court of Appeals had already ruled on Real's actions, and there was no cause for further

proceedings.

Under federal law governing complaints of judicial misconduct, "a complaint will be dismissed if it is directly related to the

merits of a judge's ruling or decision," Schroeder ruled.

Yagman pressed ahead, taking his case to the 10-judge Judicial Council, which launched its own inquiry.

Real told the council that he believed his actions would help Deborah Canter's rehabilitation. But the council said he had acted

improperly.

"A judge may not use his authority in one case to help a party in an unrelated case," the council said in a 6-4 decision. "Exercise

of judicial power in the absence of any arguably legitimate basis can amount to misconduct."

The council also said it was "well established" that a judge could not act on the basis of a secret communication or take over a

case for the purpose of affecting the outcome of a case. The council said Real had done both of these things.

"The judge here … assigned the case to himself for the very purpose of granting [Canter] relief from her imminent eviction," the

council ruled.

The fact that the judge's ruling had been "subject to appellate review does not automatically insulate the judge's conduct from

disciplinary proceedings," the council majority added. 

The council is made up of five appeals court judges and five trial court judges. All five appellate judges on the council — Arthur

L. Alarcon, William A. Fletcher, Alex Kozinski, M. Margaret McKeown and Sidney R. Thomas — joined the majority. They

were joined by Marilyn H. Patel, the chief federal trial judge in San Francisco.

Four of the trial court judges — John Coughenour of Seattle, Terry J. Hatter Jr. of Los Angeles, Marilyn L. Huff of San Diego

and Jack D. Shanstrom of Billings, Mont. — sided with Real. They did not write an opinion explaining their dissent.

The council sent the case back to Schroeder, who said in an interview that "it is on my agenda to study the matter with some

care and determine what action is appropriate."

Four legal experts, after reading the council's order and related material, said further action against Real was warranted.

"Taking a case for the purpose of affecting the result is the antithesis of impartial judging," said Stephen Gillers, vice dean of the

New York University Law School and author of a legal ethics textbook.

"These alleged transgressions deserved serious attention," he said.

USC law professor Erwin Chemerinsky agreed. "I think it is important for the 9th Circuit to say a judge should not behave this

way," he said.

Although the council's order is not the end of the matter, the professors said it was so strong that it would be very difficult for

Real to escape a reprimand.

"Schroeder obviously can't dismiss the case again," Chemerinsky said. "The only question is what sanction to impose."